HLE Glascoat Limited (HLEGLAS) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to HLE Glass Court Ltd. Q2 and H1 F527 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Vidhi Vasa from MUFG. Thank you, and over to you.

Thank you, Anna. Good evening, everyone. Welcome to the Q2 and H1FI 27 earnings conference call of HLE Glass Court Limited. Today on this call, we have Mr. Alaa Patel, Executive Director, Mr. Harsh Patel, Executive Director, Mr. Amit Kalra, Chief Financial Officer, and Mr. Nilesh Rangwala, Senior Advisor. This conference call may contain some of the forward-looking statements about the company, which are based on beliefs, opinions, and expectations as of today. Actual results may differ materially. These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict. A detailed safe harbor statement is given to the company's investor presentation, which has been uploaded on the stock exchange as well as company's website. With this, I hand over the call to Mr. Harsh Patel, sir, for the opening remarks.

Over to you, sir.

Hello. Good afternoon.

It gives me great pleasure to welcome you all to HED Glass Court Limited's Quarter 2 and H1 F527 earnings conference call. I hope you have had an opportunity to go through our financial results and the investor presentation which have been uploaded on the stock exchanges and the company's website. The global economic environment continues to remain dynamic, with geopolitical developments, inflationary pressures, supply chain realignments, and evolving trade policies influencing industrial investment decisions across markets. Despite these uncertainties, the long-term outlook for India's manufacturing and engineering sectors remain encouraging. HDD Glasgow, with its strong technological capabilities and established market presence, is well positioned to benefit from these emerging opportunities. Also, Q2 FY27 has been a significant milestone for HDD Glasgow, with our consolidated order book crossing the 1,000 crore mark for the first time in the company's history. As of September 30th, 2026. The consolidated order book stood at 1,087.3 crores, registering a growth of 51% year-on-year and 64% quarter-and-quarter, compared to 6.62 crores as of June 30, 2026. This strong order accretion reflects the confidence our customers place in our engineering capabilities. Technological expertise and execution track record across domestic and international markets. A key highlight during the quarter was the landmark order worth approximately 20.56 million euros, secured by our step-down subsidiary, Atelier Surface Technologies, GmbH, Germany, for vitreous enamel cladding panels for the Kerman-based channel connecting Germany and Denmark. This project further strengthens our international presence and provides long-term revenue visibility. The record order book, coupled with a diversified geographical presence and product portfolio, provides a strong foundation for our growth in the coming quarters. During the quarter, we witnessed a gradual improvement in business momentum following a period of geopolitical uncertainties and delays in customer delivery acceptances. The positive indicators observed in Q1 have gained further traction, particularly towards the latter part of quarter 2. Customer inquiries across the pharmaceutical and specialty chemical industries have improved, while several previously deferred projects are now again progressing towards finalization. Filtration drying and other equipment recorded revenue of 102 crores during the quarter. Glass products reflected Rs. 195.4 crores, while heat exchanger equipment contributed 48.8 crores. On a sequential basis, all three segments witnessed improvement in revenue indicating a gradual recovery in business activity. Athletic business continues to strengthen its presence in international markets, particularly across US and Europe, supported by growing customer engagement and increasing opportunities in the pharmaceutical and specialty chemical industries. While large-scale pharmaceutical capital expenditure announcements are gradually translating into project execution, we believe our international platform is well positioned to capitalize on these opportunities over the medium term. In the domestic market, the Daletek range of products introduced in India over the past few years is witnessing encouraging traction. As communicated earlier, we have viewed this as a medium-term opportunity, recognizing that wider customer adoption would require a gradual shift in market preferences and greater acceptance of advanced product offerings. We are now seeing this transition gaining momentum with Thalatec products contributing approximately 22% of our overall last-line product businesses in India during the current quarter. This represents encouraging progress in expanding our product portfolio and strengthening market penetration. Going forward, we expect customer acceptance to improve further, supporting a higher contribution from Phthalatec products, and to improve further, and creating an additional growth opportunity for our glass wine product business. With a healthy order pipeline, diversified end-user exposure, transitioning international operations, and improving business visibility, we believe HLE Glass Court is well-positioned to capitalize on emerging opportunities and deliver sustainable growth and long-term value for our shareholders. From a balance sheet perspective, we continue to follow a disciplined financial approach with a strong emphasis on working capital optimization, student capital allocation, and maintaining financial flexibility. These priorities remain central to supporting our growth objectives while ensuring financial discipline. As we move into the second half of 27, our key priorities remain focused on converting the record order book into timely project execution, improving margins through a favorable product mix, trending cost efficiencies, and further expanding our product portfolio and customer relationships. With a strong order book, a diversified business portfolio, and encouraging demand indicators across our key angelic industries, we remain optimistic about the business outlook for second half of 27. We are confident that our continued focus on execution excellence, operational efficiency, and strategic growth initiatives will enable us to strengthen our market position and deliver sustainable profitable growth in the years ahead. I will now request our CFO, Mr. Amit Kalra, to take you through the financial highlights for the second quarter and half year ended 30 September 26. Over to you, Amit.

Afternoon, everyone. I'll now take you through the financial performance of the company for the quarter and half year ended 30 September 2026. During quarter two, the company reported consolidated revenue from operations of approximately 346.7 crores INR with a growth of 15.3% compared to Q1 F527 with EBITDA of 39 crores INR and EBITDA margin of 11.2%. EBITDA grew by 72.3% quarter on quarter. The company earned profit after tax of around INR 16 crores with a fat margin. 4.6%, PAD grew 680% quarter on quarter.

For H1 F527, our revenue grew by 2% rising from

634.7 INR crores to 647.4 INR crores. Our EBITDA F526 stood at INR 61.6 crores against INR 80 crores, thus registering a degrowth of 23% year on year, and EBITDA margin stood at 9.5%. Our filtration drying and other equipment segment grew by 5.4% quarter on quarter. We reported a revenue of INR 102 crores in comparison to 96.8 INR crores in the previous quarter. Meanwhile, our glass-lined equipment business generated about INR 195.4 crores of revenue in Q2 FY27 compared to around 157.3 INR crores last year in the same quarter, reflecting a growth of 24.2%. Likewise, for H1 F527, our revenue increased by 35.4% in this segment. The heat transfer equipment segment showed a revenue degrowth by 12.3% year-on-year and growth of 362.3% quarter-on-quarter. Net working capital days increased to 102 days in line with the order book expansion from 80 days in. F526. Going forward, we remain focused on improving working capital efficiency through better inventory management, disciplined receivables collection, and optimizing the overall cash conversion cycle. Our emphasis will continue to be on prudent capital allocation, maintaining financial flexibility, and strengthening operational efficiencies to support sustainable business growth. I will now request the moderator to open the floor for Q&A. Thank you.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Averal Sharma from Finn Avenue Growth Fund. Please go ahead.

Hi, sir. I just wanted to understand the demand scenario in our key geographies. How is the demand like? And I'll come up with a second question after this.

Hi. So just to clarify, when you say key geographies, you mean country-wide. So let me start with India. So the demand scenario in India is quite optimistic. We have very high demand, as I explained in my speech, in the API sector and the specialty chemical sector. So overall demand is quite good. So, Europe, the demand in Europe is slightly subdued, but it is not really subdued, but the demand from U.S. is quite high. So, that's the general, I mean, overview of the demand from Kijama that we operate in.

Okay. Okay, thanks, sir. I also wanted to know the new CAPEX we're putting up near Anand in the heavy engineering business, right? And what is the, what are the kind of products we'll be making then?

Yeah. Hi. So, as you rightly said, we are putting up a new plant at a site which is called Adas, close to Anand. This will be largely focused on heavy equipment. So, these will be, you know, equipments which are in excess of 100, 150 tons, large diameters and lengths. So, maybe up to 4.5 to 5 meters in diameter, 15, 20 meters in length. So, these kind of equipment usually find its application in the energy sector, oil and gas, in petrochemicals, also many a times in renewable energy. So, the application can vary quite a bit, but the USP there will be our ability to handle large and complex jobs in various materials of construction.

One last question from my side. I just wanted to understand how big is the market for the cladding panel order we've got through the Omeras subsidiary. Just wanted to understand that. And is that what kind of revenues we project from there in the coming years?

Yeah, so we got a large order, which we reported some time back, about 20 point, close to 21 million euros. This is for a tunnel that is being built between Germany and Denmark. It's actually the largest under the sea tunnel that is currently being built. And we'll start supplying early next year or mid next year. And this delivery will be done over the period of three, three and a half years.

I wanted to understand the market size for this.

See, market size for this is quite large. Basically, enameled panels have two applications. One application is in infrastructure projects, and the second application is in architectural projects. Omeras has quite a strong track record in infrastructure projects. Quite a lot of metro stations in Germany are made by us. And then we have made quite a lot of tunnels around the world over the last two to three decades. So, anytime in a large, mainly in a developed market, anytime an infrastructure project like this is happening, Omera's panels have a very strong potential to be applied. Beyond that, in architectural areas, we have done a few projects, and this is one area that we have now begun to set up. And quite a few architects in the Western markets are showing large interest in using these panels for architectural projects.

Okay, understood.

Thanks. I'll get back in with you. Thank you.

Thank you. If anyone has questions, press star and one for Q&A. The next question is from the line of Uttam Purohit from VVD Asset Managers. Please go ahead.

Thank you for the opportunity. Sir, I wanted to know the quarterly render rate for Omeras and what kind of yearly turnover we are expecting from this particular subsidiary.

Can you hear me now?

Yeah. Okay.

So during this quarter, sorry, for during this entire half year, Omeras has achieved a turnover in a little excess of about 8.5 million euros and has We touched EBITDA break-even during the first half. So that's the kind of performance that we've seen. So I think we are now trying to ramp up business at Omeras to get the profit that we hope to see from there.

And if we exclude Omeras, and if we exclude the Omeras, our business for GRE and also for GRE has not performed within the domestic market on a worldwide basis. So, if you could share, like, where have been we are falling back in that perspective?

So, as I think we had mentioned during the last call at the end of the previous financial year, the Indian glass line business has started picking up. And even as we speak, the current year, we have had an EBITDA of close to, we've done revenue, sorry, of about 110 crores for during this half year. The last time business in India, and we have achieved EBITDA margins of five single digits currently. So this is relatively better than the way it was performing the previous year. And I think this third and the fourth quarter, we are hoping that performance will be better, especially in view of the kind of order book and the visibility of business that we are currently seeing.

And lastly, on the order book, if you could share the inflow figure for, order inflow figure for Q2 particularly, and also share the breakup between the segments if possible.

That's quite a large number to give you, because there are lots of parts. We actually track order book by individual plants and not just by segment itself. But suffice to say that the accretion in order book from June 26 to September 26 has been close to about 425 crores. So 425 crores is the additional or the increase in the order book itself. Add to that about 350 crores of order execution, which means the total order book or total of new orders during this period is close to about 775 crores. And this includes the 20 million, 21 million order that Amitbhai spoke about. Thank you, Abigail, I can look at you.

Thank you. The next question is from the line of Jaish Maniar from Seco Moro Advisors Private Limited. Please go ahead.

Mr. Jayesh, hello.

Thank you for your opportunity. My main question was related to Omerah, which has been already answered by the management.

The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.

Hello, thanks for the opportunity. Sir, you know, one thing we have observed over the past few years has been, you know, in the domestic segment, even when, you know, the pharma segment has been performing well, either one of our segment GLE or ANFD or filtration and drying segment hasn't performed. So, even in this quarter, despite, you know, significant demand that we are seeing from the pharma side, our JLE performance has been good, but our, you know, filtration and drying segment hasn't performed well and might have seen a YOY decline also, a significant decline on YOY basis. So, you know, just wanted to understand what has happened there. And secondly, on European business side, also Thalatec, how has been the performance for this? So, if you can talk about that, why there's been a discrepancy despite, you know, pharma performing well and both segments, GLE and filtration and drying segments catering to pharma in a big win, you know, our GLE segment performing quite well in the in this quarter.

So, just to clarify, when we say that the pharma sector is performing well, basically, that reflects the kind of order flow that we are currently seeing. Basically, we are seeing very, very good order flows from the pharma industry. Since our execution cycle can be anywhere between four to seven months, the reflection of the revenues and profits arising from those orders. Comes almost couple of quarters later. So, this order book that you see now is reflective of the kind of orders that we'll be successful in getting. And this will get executed over the next two or three quarters. And you will see the performance of a better, let's say, industry response in those three quarters. So, we normally always have a slightly delayed impact on P&L account, because that's the nature of our industry, and also the fact that we account for sales and revenue only on dispatch of the equipment, not at the time of either booking orders or at the time of even manufacturing. So, we only account for revenues only when the equipment has been dispatched to the customer.

Got it, Nilejvai. But, you know, the issue has been when we had our last call also. So, you were very bullish on the order inflow. So, now what you are saying is, like the order inflow has come and the execution will happen in S2. So, both the segments, filtration and drying and the GLE should perform well on the domestic as well as on export side. Absolutely.

You got that right. Absolutely correct. I think you understood that absolutely correctly. You see what happens typically, especially just to clarify it a little further, the quarter one and quarter two results are marginally impacted. I won't say very largely, but marginally impacted by while we have orders, sometimes delivery acceptance by customers gets postponed simply because of, let's say, things like geopolitical decisions. Disturbances and stuff like that due to which their own project execution or their own project implementation gets delayed by a month or even a couple of months here and there. So that kind of impact also happens to our dispatches. So we might have a situation and we do have a situation where products are manufactured and kept ready as per order, but are not dispatched because the customer is not ready. Now that obviously also has an impact on the revenue that we report.

So, and one more request from, you know, I think not just from me, but from larger interest in 14th fraternity was that, so, you know, we, we, our overall business, if we look at it, we have a standalone actually business in India doing both GLE and filtration and we have Teletech, we have Omidas and we have Kinam also. So, so, you know, especially on those as a standalone side, at least in the presentation, if you can get, give a broad breakup of revenues, if not margins, but at least the broad breakup of revenues, you know, how much revenues were from the domestic business, how much from, you know, Thalatec, how much Kinam, anyway, we'll come to know because there is just heat transfer equipment, but, you know, and how much from Omira's because Omira's also will have GLE now also adds to the GLE segment revenue. So, you know, it gives a brief, give us an idea on how all the three, four moving parts that we have in the company are performing because we have now become quite a large company and there are four things, three to four moving parts. So that will help us, you know, in understanding the business in more detail, at least in the presentation, if we can give that, it will be really helpful.

We'll try and incorporate this, but we'll appreciate that as a company, we are constantly evolving. In fact, maybe at this time next year, we may have another moving part, as you said, of the Omeras India business, which is also likely to get commissioned in the next two quarters or so. So, there will be multiple moving parts. So, there is, I've been very happy to share information. That's never been an issue. We also don't want information to be too cluttered, where it becomes a little difficult to understand. But I take your suggestion, and we'll definitely try to incorporate that in the coming weeks, upcoming quarter.

And on the Kinam side, you know, we first quarter, we had, you know, low execution. It has picked up in the second quarter. But sir, if you look at on a YOY basis, of course, last year we had a one big time, one large order which was executed. So, you know, how should we look at the trajectory for Kinam for, you know, FY27 and FY28, both on revenue and the margin side, given the kind of base, the last base that we had in FY26.

So, we should probably split that into two broad parts if I were to just look at Kinam as a business independently. Kinam has its traditional business, if I may put it that way, which covers the traditional businesses of chemicals, paints, APIs, and so on. So that is a business that is growing and growing reasonably. And that's, let's say, the core business on which Kinam has always stood. Last year, we had one large order, was also a breakthrough order for us to get into the oil and gas segment. And that will now be the basis of a track record creation for the future. And as Alabai mentioned, we are also planning to set up... The heavy engineering business where that track record will actually be of great and immense use to us in going forward to becoming like a tier one vendor to some of these industries. So that's really the way we would look at Kinam. One is the growth in its traditional business, and the other is the intended entry into the completely new segment of larger orders which cover oil and gas, petrochemicals, and so on.

So, so, so basically, uh, the oil and gas business that we had, you know, uh, that we had, uh, we got a large order last year. How should we look at the numbers for that going forward? Like, will it be like always be a lumpy thing that, you know, once we get a big order and that gets, uh, executed, we'll see a significant jump in revenues and, uh, improvement in margins and, uh, or how should we look at this, uh, the overall kinam's, uh, trajectory over, uh, FY27, 28.

I think it is going to be lumpy in the initial period till the time we have a track record to talk about. So maybe the first one or two orders will be spread out, may not be one immediately after the other. But I think after that, we believe that these are multiple orders that can flow, you know, and execution of them, execution for them will also be happening in parallel and simultaneously, which means that it will become a continuing ongoing business. We are probably, I think, roughly about 12 to 18 months away from that scenario.

Tup, tup. This last question, let's come back to the in the in the last one call, we had stated, you know, our ambition of reaching 15% EBITDA margins by FY28, you know, when Omeras also would be profitable and other segment, all the other businesses will also start firing, you know, in this first half, we are around 8-9% EBITDA margins. So, for FY27 and for FY28, how should we look at the margins, especially with the kind of order book ramp up that we have seen and hopefully on both GLE and NFT, we should also start seeing some, you know, some improvement in our pricing. So, if you can talk about what kind of margins we should be looking in FI 27, 28.

I think the numbers that you stated and what we had also discussed previously, I think we stand by those numbers. We still believe that we are very much on track to achieve those numbers, both, and I think a good jump in the order booking in recent months has obviously helped, and we are hopeful that we can achieve that probably earlier other than later.

Okay, so we should expect, let's say, you know, when you scale up in second half, we should, if not 15%, we should start seeing low teams kind of for EBITDA margins, 12-13%.

Actually, if we have consolidated numbers for quarter two, the quarter two EBITDA margins are at 11%, just for quarter two. So, we are already in low teens as we speak. Roughly around 11 is where we are. So, we only hope and expect that this will get better.

Okay, okay. Omiras, if you can talk about at EBITDA level, we had achieved breakeven in Q4 of last year. So, how has been its performance on the profitability side in FASTA?

I think quarter of four, we had actually incurred a loss last year. No, we had not achieved breakeven. We've achieved breakeven in H1 of this year. So, H1 for the entire half year, we are at EBITDA breakeven.

Okay, and PBT is lost because of the...

Because PBT is marginally lost due to interest in depreciation, yes.

Thank you, and wish you all the rest of the day.

Thank you. The next question is from the line of Ajay from Nivshare. Please go ahead.

Thanks for the opportunity, sir, and congratulations on the fantastic order book. So, my first question is, if you can, like, help us explain the order, like, if you can give some more details on the order book, like, because we've had in the past some large order when, like, for example, Kinam, because this is the consolidated order book, so one large order, like, is there some kind of, like, big orders in the order book, which is there? And also in past, we also mentioned that because the competition intensity in the Indian glass lining was increasing, so like there were bids happening at even lower pricing. So does this order book which we have at this moment, does that also include maybe some lower pricing order because of the competition intensity? So if you can just give some more color on the order book and also like post September, I mean, how are we currently maybe seeing the pipeline getting built up further for maybe India and Europe?

Yeah. So as far as the order book is concerned, I think out of the 100 or rather out of the 1087 odd crores of order book, one order obviously stands out, which is the order for the ferment belt tunnel. So even if you remove the 210 or 20 odd crores of order booking from that, which is, let's say, to be delivered over the next three years or so. We are still looking at an order book which is close to, you know, 875 crores. So, out of this order book, currently, we don't have any order which is similar to what we had for Kinam earlier, right? So, all of that order book comes from regular, repeating, sustainable business. Obviously, within that, there will obviously be certain large orders, certain very large orders, and obviously, a lot of not-so-large orders. So, there is always a mix of project orders of different sizes, but they all form a part of our regular routine business catering to our core industries and regular customers. Can you please remind me what your next question was? Sorry.

No sir, so again just like continuing on this, so I wanted to understand the competition intensity like because there are multiple businesses like FND, ZLE, then Kinam for Heat Exchanger and Omeral. So like if you can give some like describe the competition intensity particularly for maybe India, Glass Lining and FND.

So, I think when we speak about competitive intensity, a large portion of the... The competitive intensity for a couple of quarters now was driven mainly by equipment manufacturers trying to fill capacity. So with the market demand picking up, I think obviously that competitive intensity has gone down. We are able to not only book orders, we are able to book orders at improving margins month after month. What HLE is also doing differently is positioning itself as a technology solution provider. As we have been speaking for many quarters now, we have placed Saratek as a premium offering in the Indian market. We continue to drive technology adoption even in the filtration and drying market. And positioning a premium product in both these sectors, as you might imagine, is easier to do when the demand is higher and you have the luxury, so to speak, to bid for premium orders. So, I think this covers our view on the competitive intensity.

Got it. And so, like, I mean, on Omeraz, so, I mean, more than a year has been now passed. So, are we now seeing any new hiring in this, like, have we shifted maybe some existing people from HLA to there or any new hirings over there? Because as a company or as a group, we have, like, always acquired a few companies, turned around them, and then grown on a, like, platform. So, just on Homera's, maybe, like, in last one year, what has maybe changed on ground over there, and any new hiring or specific people shifting has been done over there?

Yes. So, there has been a significant enhancement in capabilities and capacities both. So, as an example, we have a new chief operations officer who has come from a large American multinational joint, Umeras, which is now known as Italy Surface Technologies. Then we have a new CFO who is on board since a couple of quarters. We have enhanced our design team. We have added new people in the sales teams across various geographies in Europe. There has been quite a significant improvement in both capabilities and capacities to take the company forward and achieve the turnaround as fast as possible.

So, like, I mean, because, like, now we have this big order of this maybe three-year execution period. So, I mean, even if we have, like, almost 50-60 odd crore annual revenue run rate. So, and when I was looking at the past acquisition, the gross margins of this business are significantly higher. Like, even in last, like, maybe four quarters, if we see the gross margins for our business on consolidated business has increased. So, I mean, does that 50-60 odd crore run rate now gives us an extra room to maybe grow at an aggressive rate or something like maybe that fills up the expenses which we were maybe incurring like kind of fixed or fixed nature expenses? I'm sorry to interrupt you, sir.

If you have follow-up questions, please rejoin the queue.

Maybe if we can complete this one.

Okay, let me answer this question. Yes, you're right. We normally identify businesses which have potential for high revenue and profits going forward, and Omeras is no exception. I think we mentioned that once we cross break-even, the increase in profitability is likely to be relatively quicker than, let's say, other businesses of a similar nature, simply because of the higher gross margin, which will flow down to the bottom line. So, we need to build on the revenues. We think that once we cross the 20 million euro revenue per annum, the company should get back to serious profitability, and maybe at about 25 million, between 25 and 30 million, we could even be as high as double-digit EBITDA margins.

Martin, Martin. I'll run back in India.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. Should you have follow-up questions, please rejoin the queue. The next question is from the line of Dhvanyan Desai from Turtle Capital. Please go ahead.

Hi, good afternoon. So, my first question is, you know, in some of the previous calls, we had mentioned that even though for the India GLE business, the revenue is almost similar or slightly less than the previous cycle peak, but the volumes are 30-40% higher. So can you give, throw some more light on this, this drop in realization is just a function of product mix because all other prices would have gone up in last four, five years. So how should we look at this? Why the realizations went down? And secondly, with Thalatec portfolios scaling up in India, shall we expect a realization uptick, you know, going forward?

Yeah, so I think the...

The number of equipment that we manufacture

and the value that it converts into is dependent on multiple factors. One is, of course, the price, as you rightly mentioned. The second is the size of the equipment. And the third is the complexity of the equipment. So it's normally a kind of a mix of all these complexities that build the product mix and hence the final price. So, as we move away from, let's say, more commoditized products and we move into more specialized products, which we are trying to say, which we are... Talking about with the Thalitec products, we're actually going towards more premium manufacture. We're looking at better realizations and also better margins. This will reflect in the coming quarters.

Got it. So, taking forward this, you know, India GLE business, I think we were probably in the last cycle, the peak was 30 to 40 odd crores. So, from here, how do we see part to, let's say, you know, 380, 400 crores? What will drive that? Do you think we can do that in, you know, a couple of years? And we used to do, you know, 17, 18% margin. And I think we mentioned that that remains an ambition for India GLE business. So you mentioned currently we are at a high single digit number for the current H1. So from that to again, reaching that high tens, you know, how do we see the path?

Again, I think the answer in this is the way the costing for a product like this works out. GLE in India is also a high gross margin business. The fixed costs in this business are high, and hence, once we cross a certain threshold, the increase in or the flow of profits and contribution to the bottom line is quite substantial. So, historically, our best year has been the year in which we did roughly about 300 crores revenue, a little under 300 crores to be precise, actually. And that's probably the year in which we had margins in excess of 18% at the EBITDA level. We believe that even at current levels of operation, current levels of expenditure, even with a 300-odd crore revenue, we could still be between 16% and 18% kind of EBITDA levels going forward. And this is driven by two main things. One is, of course, Better realization coming from more technology-driven products, which is the Thalatec range that we have introduced and about which Arshman and Alabai spoke about earlier. And secondly, of course, the discipline over the costs that we have been able to maintain over the years.

So with current order book, do we see that reaching the 300 or crores next year or think it will take longer?

So, I add the current visibility is predominantly for FI27 because the order book that we have would be executed predominantly during quarter three and quarter four. We expect the number, the revenue this year to be anywhere between 260 and 280 crores.

Very good. Thank you, and we should all the rest.

Thank you. The next question is from the line of Ajit Sethi from EcoQuantum Solutions. Please go ahead.

Yeah, thank you for the opportunity. Sir, in your earlier phone call, you have guided for 2000 crore revenue target for FY28. So this guidance stays intact for FY28, right? Yes, I think we are on track for that, yes. Okay, so if I just do the math, this implies a revenue target of 22-22% growth target, and we have done 648 crore in H1, so for H2, we have to do around 35% growth, so are we on track to achieve that?

I see I think it will be difficult for me to give you a number for every quarter or half year. But suffice to say the 2000 crore revenue is going to be driven by existing products. It's also going to be driven by new products. It's also going to be driven by the new plant for Omeras products that we are starting manufacture for in India. So we're going to be launching these products in India also. So it's going to be a mix of all of that. It's not just... Growth from existing product range. We also have a range of other products that we propose to introduce for which actions have already been taken.

Okay, I'm sure you are guiding for an EBITDA margin target of 15% by FCA28. So, could you please explain the key growth drivers that will help the company to achieve this significant margin improvement?

To be very honest, 15% is not an improvement. It is something that we've historically achieved and we are just getting back to those numbers. So, I would not say it's an improvement. We do believe… Inam can deliver about 16% on a sustainable basis. We believe the filtration drying business can deliver about 16% on a sustainable basis. We believe glass line equipments in India, after ramping up, as we are now seeing clear signs of, can be in the mid-teens, which would be, let's say, in the 12 to 14% range going forward. And Caratech has historically always been in that well to 14% EBITDA range. If you take a weighted average of all of this, it does come to 15% in any case. So I think 15% is not something that is out of the box. I think we are very, very confident of achieving those numbers.

And so far, beyond FY28, as the new Omeris plant will be operational in India, so can we expect to sustain this 15 to 20% stagger going forward?

Are you talking about the period after FY28 or are you talking about the period?

Yeah, after FY28, yeah.

After FY28, I think we are expecting our growth to be more in line with the market growth. And of course, we will also innovate and bring in newer and newer products from time to time. In addition, the recent announcement that we made about the additional manufacture of heavy engineering products This will be a new product which will add substantially to the post-28. So, that will be a driver for, let's say, I would say, above the ordinary growth. So, let's say, ordinary growth can give you about 15%, 17%, 18%, and then heavy engineering can add maybe another 5% or 7% on top of that.

And sir, what is the EBITDA margin expected for this heavy engineering segment?

In the initial period, the margins could be in the range of between 15% to 18%. Going forward, on a more mature basis, this business should deliver EBITDA margins of close to over 22%.

And what is the peak revenue potential from this heavy engineering segment?

Oh, the peak revenue is, I don't know, companies, we have companies that we all know of who have done very in excess of 1,500 or 2,000 crores solely in this business. So I don't think that the peak is only what you bring up on your own self. There is really no ceiling. This is a very big market. It all depends on capacity and capability.

Thank you. Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.

Yeah, thanks for the opportunity again. Sir, you know, if you listen to the phone calls of so many companies across various sectors, one thing is very clear that the costs have gone up significantly across majority of the European companies, you know, with the rising fuel cost and rising employee cost. We have two of our subsidiaries, you know, Thalatec and a newly acquired one in both operating out of Europe. So how are we dealing with such a sharp rise in costs over there? And, you know, if you can talk about it in more detail and, you know, how are we being able to maintain our profitability and projecting profitable growth there?

Yeah, so as you rightly said, Europe is facing a lot of cost pressure, and thankfully, both of our companies are well-equipped to handle that because we already have a well-established manufacturing base here in India, right? And historically, the challenge in... The challenge for these companies to source from India was customer acceptance, because in critical equipment that are used in the chemical and API manufacturing, customers would usually push back on equipment that are not fully manufactured in Europe. So historically, this was the primary challenge that they faced. However, given the cost challenges that our end users are facing themselves, right, so the chemical industry and the pharma industry, I think they are now themselves exploring options to make their capex more efficient. And as a result, they are now engaging more and more with customers across the globe. And as and when this shift or transition happens... We are ideally suited to capitalize on that. We already, you know, partner a lot with our German subsidiaries to source, to rather strategically source items from India. And we will also look at more ways to use the low-cost manufacturing and services base of India to soften the effect of the cost pressure that we are seeing in Europe.

So, for both Thalatec and Omegas, do we plan to substantially shift manufacturing out of Europe to our Indian operations? Is that the right understanding?

I believe that, or rather, we believe that there is still a large portion of the market in Europe where a European-made equipment or a European-made enameled panel still finds application. And the transition to, let's say, non-European-made equipment, we don't believe that it will fully transition to an Indian-made equipment, let's say, per se. What will happen over the next couple of years is that certain non-critical portions of the equipment will... We will be sourced from India, and the components that will be supplied from a low-cost manufacturing base, the share of such components will increase over the next coming years. But there will always be applications which are critical enough which warrant the use of a European-made equipment. So we don't see, at least in the medium term, a scenario where the European manufacturing plants will be empty and everything will be sourced from India or another low-cost country.

And on Teletech, if you can share the H1 revenue and EBITDA margin numbers. Yeah, just give us a second, please.

Thank you.

So, the revenue for the first half from Thalitech, Germany, is about 192 crores. And the... And the EBITDA margin was roughly about a little over 11, 11 and a half percent.

Sure, sure, sure. And how much was it last year in H1 of F526?

F526, the revenues were at about 343 crores. And EBITDA last year was a little under 11%.

Okay. And there's been a significant decline in revenues over here, right?

No, I think on a run, this is for a 12-month period, I'm saying. The previous year, I'm going to say, is a 12-month period.

12 months, okay. I thought it was all right.

So, yeah. So, if you see pro-rata, it's almost about a 12% to 13% increase. Okay.

Got it. Okay.

Okay, sir. Thank you, Anishana.

Thank you. The next question is from the line of Raj Patel from RK Securities. Please go ahead.

Thank you for the opportunity. So, I just have a couple of questions.

The participant seems to have disconnected. Since that was the last question for today, I now hand the conference over to the management for closing.

Thank you very much for the participation.

I'm sorry most of the queries. We are committed to good governance and

The next question is from the line of Ajay from Newsshare. Please go ahead.

Hello, are we still taking it?

Yes, sir. Please go ahead.

Just one thing, like, I mean, we have seen a company acquiring maybe a few assets over a couple of years. So, maybe going forward, if you can share some roadmap. Like, we also have some roughly 350 odd crore of debt on the book and then also have a very good cash flow, like free cash flow. So, uh, going forward, would it be more, uh, toward maybe acquiring any new, uh, are we like looking for any new acquisition, uh, as of now, or that would maybe going forward be used toward maybe debt repayment, uh, in the longer picture?

I think our, sorry, I think you were the last caller after the last caller. So, sorry, we had a kind of a... I think the management is driven by consolidation at this point of time. All our businesses are looking promising and encouraging. We've just completed the acquisition of Omeras just about a year back. I think it's a good time for us to sit back and consolidate it, consolidate operations. The debt on an overall basis is very manageable and not an area of concern at all. But at the same time, we would like to kind of always build for a rainy day going forward. Having said that, if at all, we get an opportunity, a strategic opportunity, which is in. And around our core area of expertise and interest, and is also for size and scale that we are in a position to digest, we would then look at it. But in general, I think the current feeling within the management is to build on the existing businesses and consolidate.

Thank you, Martin. Now that's it for myself. Thank you.

Thank you.

Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks.

So, thank you very much. I think I already closed, but I can close again. So, I thank all the investors for having faith in HLA Glass Court, and I hope you have been able to answer all the questions. See you in the next conference call. Thank you.

Thank you. On behalf of HLE Glass Code Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.